Hero photograph: Scott Graham / Unsplash.
At a Glance
Why Sections 18 and 19 Matter in Recovery Litigation
Limitation disputes in money-recovery, commercial, banking, arbitration and insolvency matters frequently turn not on the original invoice or loan date, but on what happened afterwards. A signed balance sheet, restructuring agreement, written reply, email, settlement communication, ledger confirmation or qualifying part-payment may alter the limitation computation.
At the same time, courts repeatedly reject attempts to revive stale claims through vague correspondence, unilateral ledger entries, legal notices, post-expiry admissions or payments that do not satisfy the statutory conditions.
The first question should therefore always be: what was the original limitation expiry date? Only then should counsel test each alleged acknowledgment or payment in chronological order.
Section 18: Effect of Acknowledgment in Writing
Section 18 applies where, before expiry of the prescribed limitation period, there is an acknowledgment of liability in respect of the relevant property or right, made in writing and signed by the party against whom the right is claimed or by a person through whom that party derives title or liability.
When those conditions are satisfied, a fresh period of limitation is computed from the time the acknowledgment was signed.
The acknowledgment does not create the original debt. It recognises a subsisting jural relationship and changes the limitation starting point.
Four Core Requirements of Section 18
- There must be an acknowledgment of liability. The writing must indicate a subsisting jural relationship relating to the property or right in question.
- It must be in writing.
- It must be signed by the debtor or an authorised person.
- It must be made before the existing limitation period expires.
If even one of these elements fails, Section 18 does not start a fresh period.
The Acknowledgment Need Not Contain an Express Promise to Pay
Section 18 is broader than an express promise. The writing need not say, “I promise to pay you.” It is enough if, read fairly and in context, it recognises a present subsisting liability and the relevant jural relationship.
The statutory Explanation makes this especially important. An acknowledgment can still qualify even if it:
- does not specify the exact nature of the property or right;
- says the time for payment or performance has not yet arrived;
- is accompanied by a refusal to pay;
- is coupled with a claim of set-off; or
- is addressed to someone other than the person ultimately enforcing the right.
2025 Supreme Court: Partial Acknowledgment Does Not Extend the Entire Claim
In M/s Airen and Associates v. M/s Sanmar Engineering Services Ltd., decided on 24 July 2025, the Supreme Court dealt with a recovery claim where the respondent had acknowledged only part of the amount asserted by the claimant.
The Court held that where the writing does not acknowledge the full amount claimed, Section 18 cannot be used to extend limitation for the unacknowledged balance. The fresh limitation benefit corresponds to the liability actually acknowledged.
This is a highly practical rule in invoice disputes. A reply saying, for example, “₹2 lakh is payable, but the remaining ₹8 lakh is disputed” should not automatically be treated as an acknowledgment of the entire ₹10 lakh claim.
Supreme Court order: Airen and Associates v. Sanmar Engineering Services Ltd.
2026 Supreme Court: B. Prashanth Hegde v. State Bank of India
In B. Prashanth Hegde v. State Bank of India, 2026 INSC 155, decided on 12 February 2026, the Supreme Court reaffirmed the significance of corporate balance sheets and restructuring documents as acknowledgments under Section 18.
The Court held that balance sheets signed by directors of the corporate debtor could constitute valid acknowledgments of debt. The fact that the financial statements carried a caveat that recovery proceedings were sub judice did not, on the facts, prevent the acknowledgment from operating under Section 18.
The judgment also reiterates that a director can act as the company’s agent for purposes of the signature requirement under Section 18.
The case is especially important for banks, financial creditors, companies and insolvency practitioners because it confirms that the limitation analysis should review successive financial statements and restructuring agreements rather than mechanically stop at the original NPA date.
Read the Supreme Court judgment: B. Prashanth Hegde v. SBI
Balance Sheets as Acknowledgment: The Correct Rule
A balance sheet can constitute an acknowledgment under Section 18, but not every balance-sheet entry automatically does so.
The Supreme Court in Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal and the later cases has made the enquiry document-specific. Courts consider:
- whether the relevant liability is actually reflected;
- whether the financial statement is properly signed;
- whether the entry identifies or can be connected to the creditor and debt;
- whether accompanying notes or auditors’ qualifications negate or materially limit the admission;
- whether the statement was signed before limitation expired; and
- whether the document recognises a subsisting liability rather than merely recording a historical dispute.
2026 Delhi High Court: SNG Developers v. Lord Vardhman Buildtech
In SNG Developers Ltd. v. Lord Vardhman Buildtech Pvt. Ltd., the Delhi High Court in 2026 upheld treatment of repeated financial-statement entries showing an “advance against sale of school plot” as acknowledgments under Section 18.
The repeated entries across successive financial years, without a qualifying denial inconsistent with liability, were relevant because each acknowledgment made within the running limitation period could start a fresh period.
This demonstrates why a limitation chronology in commercial disputes should not simply list invoices. It should separately list every signed balance sheet, audited statement, confirmation, restructuring document and written admission.
2026 Supreme Court: Shankar Khandelwal v. Omkara Asset Reconstruction
In Shankar Khandelwal v. Omkara Asset Reconstruction Pvt. Ltd., 2026 INSC 429, decided on 29 April 2026, the Supreme Court restated three essential Section 18 propositions:
- the acknowledgment must come from the party against whom the right is claimed or a duly authorised person;
- it must be made before the limitation period has expired; and
- it must show a conscious and unequivocal intention to recognise a subsisting jural relationship and liability.
The Court held that admission of a creditor’s claim by an IRP/RP during a corporate insolvency process is an administrative act of collation and does not amount to an acknowledgment by the corporate debtor under Section 18.
Most importantly, Section 18 can only extend a limitation period that is still alive. An acknowledgment made after the claim is already time-barred cannot resurrect it under Section 18.
Read: Shankar Khandelwal v. Omkara Asset Reconstruction
Can an Acknowledgment Made After Expiry Revive Limitation?
No, not under Section 18. The statute expressly requires acknowledgment before expiry of the prescribed period.
This should be distinguished from Section 25(3) of the Indian Contract Act, 1872. A written and signed promise to pay wholly or in part a debt that would otherwise be unenforceable because of limitation can, if its requirements are satisfied, amount to a fresh enforceable contract.
| Section 18 Limitation Act | Section 25(3) Contract Act |
|---|---|
| Must be made before limitation expires. | Can concern a debt already barred by limitation. |
| No express promise to pay is necessary. | Requires a promise to pay the time-barred debt or part of it. |
| Starts a fresh limitation period on the existing right. | May create an enforceable contractual promise despite the old debt being time-barred. |
| Recognition of jural relationship may suffice. | The promise must be identifiable and legally sufficient. |
Emails as Acknowledgments
Electronic correspondence can satisfy Section 18 where the writing, authorship/signature requirement and acknowledgment of liability are proved.
In Flexing It Services Pvt. Ltd. v. Colvyn James Harris, decided by the Delhi High Court on 6 April 2026, the Court considered email correspondence in the Section 18 analysis and referred to earlier authority recognising emailed acknowledgments as capable of satisfying the provision.
The correct rule is not that “every email extends limitation.” The email must still:
- be attributable to the debtor or authorised representative;
- be made within the running limitation period;
- recognise the relevant subsisting liability or jural relationship; and
- be proved in accordance with applicable electronic-evidence law.
Delhi High Court judgment: Flexing It Services
WhatsApp Messages and Other Electronic Communications
WhatsApp messages can also become relevant, but courts must be satisfied about authorship, authenticity, context and the statutory requirements of Section 18.
A message such as “I acknowledge ₹5 lakh remains due and will arrange payment” is legally very different from “we will discuss accounts next week.” The former may recognise a subsisting liability; the latter may not.
In electronic-message cases, counsel should preserve:
- the complete conversation, not isolated screenshots;
- phone-number and identity linkage;
- device/export records where available;
- metadata and surrounding messages;
- the applicable electronic-record certificate under the Bharatiya Sakshya Adhiniyam, 2023; and
- proof that the communication was made before limitation expired.
Does a Reply Denying Liability Still Count?
Sometimes, but the document must be read as a whole.
Section 18 itself recognises that acknowledgment may be accompanied by a refusal to pay or a claim of set-off. Therefore, a debtor cannot necessarily defeat Section 18 merely by adding words such as “we are not paying because…” if the writing otherwise admits the underlying liability.
But a document that completely denies the existence of the debt and merely refers to the claimant’s allegation is not an acknowledgment. The distinction is between admitting liability but disputing payment or quantum and denying the jural relationship itself.
Legal Notices Do Not Extend Limitation by Themselves
A legal notice sent by the creditor is unilateral. It does not constitute an acknowledgment by the debtor.
A reply to the notice may extend limitation if it independently satisfies Section 18. Therefore, counsel should distinguish:
- date of creditor’s legal notice;
- date and contents of debtor’s reply; and
- whether the reply was issued before expiry of limitation.
Delhi courts in 2025–26 have repeatedly reiterated that issuing a legal notice does not restart limitation merely because the creditor formally demanded payment.
Settlement and One-Time Settlement Communications
Settlement proposals, OTS letters and restructuring communications are highly fact-sensitive. A proposal may amount to acknowledgment where it recognises the subsisting debt, even if the debtor seeks a concession or revised payment schedule.
However, counsel should not assume that every “without prejudice” communication automatically qualifies or automatically fails. The language, purpose, admissibility, recognition of liability and statutory timing must be examined.
Running Accounts and Ledger Confirmations
A creditor’s own unilateral ledger does not become an acknowledgment merely because it records an outstanding balance. Section 18 requires acknowledgment by the debtor or authorised person.
By contrast, a signed balance confirmation, signed ledger statement, reconciliation email or written confirmation from the debtor may qualify where it recognises the liability.
In running-account litigation, the following should be separated:
- individual invoice due dates;
- appropriation of payments;
- mutual/open/current account questions;
- signed confirmations;
- part-payments under Section 19; and
- independent acknowledgments under Section 18.
Section 19: Effect of Payment on Account of Debt
Section 19 deals with a different event: payment on account of a debt or interest on a legacy.
Where a qualifying payment is made before expiry of the prescribed period by the person liable or a duly authorised agent, a fresh period of limitation is computed from the time payment was made, subject to the statutory proviso concerning acknowledgment of the payment.
The provision is commonly invoked where a debtor pays part of an invoice, loan, running account or admitted balance before the original limitation period expires.
Requirements of Section 19
For a claimant relying on part-payment, the safest formulation is:
- there must be payment on account of the debt;
- the payment must be made before expiry of the existing limitation period;
- it must be made by the debtor or duly authorised agent; and
- the acknowledgment of that payment must satisfy the writing requirement in the proviso.
The Supreme Court’s decision in Shanti Conductors Pvt. Ltd. v. Assam State Electricity Board remains the leading modern authority on these requirements.
2026 Delhi Position on Part-Payment: Rimjhim Stainless
In Rimjhim Stainless Ltd. v. Mukesh Singhal, decided on 4 February 2026, the Delhi High Court dealt with payments against invoices and analysed both Sections 18 and 19.
The Court treated a payment made against the relevant invoices within limitation as capable of attracting Section 19 and also considered contemporaneous letters that acknowledged delivery and liability while disputing part of the amount.
The case illustrates why Sections 18 and 19 should often be pleaded in the alternative where both written acknowledgment and actual part-payment occurred.
Read: Rimjhim Stainless Ltd. v. Mukesh Singhal
Part-Payment by Bank Transfer: Is the Transfer Alone Enough?
Not always. The statutory proviso to Section 19 must be addressed.
A bank entry may prove that money moved, but the claimant must still establish that the payment was on account of the particular debt and satisfy the statutory written-acknowledgment requirement relating to the payment.
The strongest cases usually contain supporting material such as:
- payment narration;
- email confirming the payment;
- signed statement of account;
- payment advice;
- ledger confirmation signed by the debtor;
- TDS documentation connected to the invoice; or
- reply admitting that a specified payment was made toward the debt.
TDS Deduction and Section 19
TDS can become relevant where the evidence shows that the deduction/payment is directly referable to the underlying liability. Delhi High Court authority in 2025 recognised that a valid TDS payment, on the facts of that case, could attract Section 19 for the relevant invoice claim.
But TDS should not be treated as a universal limitation-saving device. Counsel must connect the tax deduction to the specific debt and satisfy the other statutory requirements.
A Payment After Limitation Has Expired
A payment made after the prescribed period has already expired does not start a fresh period under Section 19 because the section itself requires payment before expiration of the prescribed period.
As with Section 18, counsel should therefore calculate limitation first and test the payment second.
Can Repeated Acknowledgments Keep Starting Fresh Periods?
Yes, provided each later acknowledgment is itself made while limitation is still running.
Example:
- Debt due: 1 January 2023.
- Ordinary limitation: until 31 December 2025, subject to the applicable Article.
- Valid acknowledgment: 1 June 2025.
- Fresh period starts: 1 June 2025.
- Another valid acknowledgment: 1 May 2027, if still within the freshly running period.
- A further fresh period may then begin from 1 May 2027.
This is why a corporate creditor should preserve every qualifying acknowledgment rather than rely only on the latest communication.
What If the Acknowledgment Is Undated?
Section 18(2) expressly addresses an undated writing. Oral evidence may be given to establish when it was signed, although oral evidence of the contents of the acknowledgment is restricted by the applicable evidence law.
The timing question remains essential because the acknowledgment must be shown to have been signed before expiry.
Who Can Sign the Acknowledgment?
The signature can be that of the party against whom the right is claimed or an agent duly authorised in that behalf.
For companies, potential signatories can include directors or authorised officers depending on authority and context. B. Prashanth Hegde confirms that a director signing the company’s balance sheet can satisfy the agency/signature requirement.
By contrast, Shankar Khandelwal shows why an IRP/RP’s administrative admission of a claim cannot simply be treated as the corporate debtor’s own acknowledgment.
Does the Creditor Need to Be Named?
Not invariably. The writing must be capable of being connected to the property or right and the relevant jural relationship. The statutory Explanation also recognises that acknowledgment may be addressed to someone other than the person entitled to enforce the right.
But where the creditor is not named, the claimant must prove the nexus between the writing and the liability relied upon. This is particularly important with generic balance-sheet entries such as “trade creditors,” “advances,” or “unsecured loans.”
Acknowledgment vs Admission Under the Evidence Law
An acknowledgment under Section 18 is a specialised limitation concept. Not every evidentiary admission automatically satisfies Section 18.
The writing must satisfy the statutory timing, signature, liability and jural-relationship requirements. Conversely, a document may qualify under Section 18 even if it falls short of an unconditional promise to pay.
Section 18 in Insolvency Proceedings
Section 238A of the Insolvency and Bankruptcy Code applies the Limitation Act to IBC proceedings. The Supreme Court has repeatedly recognised Section 18 acknowledgments in that context.
The current position after the 2026 decisions can be summarised as follows:
- signed balance sheets may extend limitation;
- restructuring documents and other signed admissions may extend limitation;
- the acknowledgment must still be before expiry;
- the debt acknowledged must be connected to the creditor’s claim; and
- admission of a claim by an IRP/RP does not itself constitute acknowledgment by the corporate debtor.
Section 18 in Arbitration
The Limitation Act applies to arbitration through Section 43 of the Arbitration and Conciliation Act. Acknowledgment of the underlying contractual liability may therefore affect limitation for commencement of arbitration.
Commercial parties should preserve emails, payment confirmations, signed statements, balance sheets, minutes and settlement correspondence. The court or tribunal will examine whether the communication acknowledges the same liability ultimately pursued in arbitration.
Section 18 and Order VII Rule 11 CPC
Where a plaint appears time-barred on its face, a pleaded acknowledgment may become central to an Order VII Rule 11(d) objection.
If the plaint itself identifies a valid written acknowledgment made within limitation, rejection may not be possible merely by ignoring that document. Conversely, if the alleged acknowledgment is plainly post-expiry or does not acknowledge the relevant liability even on the plaintiff’s own showing, the limitation objection may succeed at the threshold.
The exact approach depends on the plaint and documents that can lawfully be considered at the Rule 11 stage.
How to Plead Section 18 Properly
- Identify the original cause-of-action date.
- Identify the applicable limitation Article and original expiry date.
- Quote or reproduce the material part of the acknowledgment.
- State its date.
- Identify the signatory and authority.
- Explain the liability acknowledged.
- State that the acknowledgment preceded expiry.
- Compute the fresh limitation period from the signature date.
- If there are repeated acknowledgments, set them out chronologically.
- Where electronic, plead authorship and electronic-evidence compliance.
How to Plead Section 19 Properly
- Identify the debt and original limitation period.
- State the exact payment date and amount.
- Show that payment preceded expiry.
- Show that the payer was the debtor or authorised agent.
- Identify the written acknowledgment of payment required by the proviso.
- Connect the payment to the debt relied upon.
- State the fresh limitation expiry date.
Suggested Limitation Chronology
| Date | Event | Legal effect |
|---|---|---|
| Original due date | Invoice / loan / contractual sum becomes due | Initial limitation begins |
| First acknowledgment | Signed letter / email / balance sheet | Test Section 18 and fresh starting point |
| Part-payment | Payment toward debt | Test Section 19 requirements |
| Second acknowledgment | Restructuring / balance confirmation / reply | Test whether made within freshly running period |
| Proceeding instituted | Suit / arbitration / IBC application | Compare filing date with final computed expiry |
How to Oppose a Section 18 Claim
A defendant should test each alleged acknowledgment separately:
- Was it signed before limitation expired?
- Was it signed by the debtor or an authorised person?
- Does it concern the same debt or property right?
- Does it recognise a subsisting jural relationship?
- Does it acknowledge only part of the amount?
- Do qualifications or notes negate the alleged admission?
- Is the email/WhatsApp communication properly proved and attributable?
- Is the alleged acknowledgment actually only the creditor’s own notice or ledger?
- Is the claimant attempting to rely on an IRP/RP claim admission rather than a debtor acknowledgment?
How to Oppose a Section 19 Claim
- Payment occurred after expiry.
- Payment was not made on account of the debt sued upon.
- The payer lacked authority.
- The statutory acknowledgment-of-payment requirement is not satisfied.
- The claimant cannot identify which invoice or liability the payment relates to.
- The payment was refund, security, adjustment or another transaction rather than part-payment of the asserted debt.
2025–26 Case Matrix
| Case | Issue | Key principle |
|---|---|---|
| Airen and Associates v. Sanmar Engineering Services Ltd., Supreme Court, 24 Jul 2025 | Partial acknowledgment | Acknowledgment of only part of the debt does not extend limitation for the entire disputed claim. |
| B. Prashanth Hegde v. State Bank of India, 2026 INSC 155 | Balance sheets / restructuring / IBC | Signed balance sheets can acknowledge debt and extend limitation; a director can satisfy the signature requirement on behalf of the company. |
| Rimjhim Stainless Ltd. v. Mukesh Singhal, Delhi HC, 4 Feb 2026 | Invoice payment and acknowledgment | Part-payment within limitation can attract Section 19; contemporaneous writings may independently attract Section 18. |
| Flexing It Services Pvt. Ltd. v. Colvyn James Harris, Delhi HC, 6 Apr 2026 | Email acknowledgments | Electronic correspondence can qualify where it acknowledges the subsisting liability and satisfies Section 18 requirements. |
| Shankar Khandelwal v. Omkara ARC, 2026 INSC 429 | Post-expiry acknowledgment / RP admission | Acknowledgment must precede expiry and come from the debtor or authorised person; IRP/RP claim admission is not the debtor’s acknowledgment. |
| SNG Developers Ltd. v. Lord Vardhman Buildtech Pvt. Ltd., Delhi HC, 2026 | Balance-sheet entries | Consistent signed financial-statement entries identifying the liability can constitute repeated acknowledgments. |
Frequently Asked Questions
Does acknowledgment of debt restart limitation?
Yes, if Section 18 is satisfied: the acknowledgment must be in writing, signed by the debtor or authorised person, concern the relevant subsisting liability and be made before the existing limitation period expires.
Can an acknowledgment after three years revive a time-barred debt?
Not under Section 18. A separate written promise to pay a time-barred debt may need examination under Section 25(3) of the Contract Act.
Can a balance sheet extend limitation?
Yes. A properly signed balance sheet can amount to acknowledgment, subject to the actual entry, accompanying notes or qualifications, connection to the creditor’s debt and timing.
Can an email extend limitation?
Yes in an appropriate case. The communication must be attributable to the debtor or authorised representative, acknowledge the relevant liability and satisfy the timing and electronic-evidence requirements.
Can WhatsApp messages extend limitation?
Potentially yes, but not automatically. Authorship, authenticity, context, acknowledgment of the actual liability and electronic-evidence compliance must be established.
Does a legal notice restart limitation?
No. A creditor’s legal notice is unilateral. A debtor’s reply may independently qualify if it satisfies Section 18.
Does refusal to pay destroy an acknowledgment?
Not necessarily. Section 18 expressly recognises that an acknowledgment may be accompanied by refusal to pay or a claim of set-off.
Does part-payment restart limitation?
It can under Section 19 if the payment is made before expiry by the liable person or authorised agent and the statutory requirement concerning acknowledgment of the payment is satisfied.
Does a bank transfer alone always prove Section 19?
No. The claimant should prove that the transfer was on account of the particular debt and satisfy the writing requirement in Section 19’s proviso.
Can acknowledgment of ₹2 lakh extend limitation for a disputed ₹10 lakh claim?
Not automatically. Airen and Associates confirms that acknowledgment of only part of the debt cannot be used to extend limitation for the entire unacknowledged balance.
Can an IRP or RP’s admission of a claim extend limitation?
No merely by itself. Shankar Khandelwal holds that the RP’s administrative admission/collation of a claim is not an acknowledgment by the corporate debtor under Section 18.
Primary Authorities
- Limitation Act, 1963 — Sections 18, 19 and 29(2).
- Indian Contract Act, 1872 — Section 25(3).
- Lakshmirattan Cotton Mills Co. Ltd. v. Aluminium Corporation of India Ltd., (1971) 1 SCC 67.
- Shanti Conductors Pvt. Ltd. v. Assam State Electricity Board, (2020) 2 SCC 677.
- Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal, (2021) 6 SCC 366.
- Dena Bank v. C. Shivakumar Reddy, (2021) 10 SCC 330.
- Airen and Associates v. Sanmar Engineering Services Ltd., Supreme Court, 24 July 2025.
- B. Prashanth Hegde v. State Bank of India, 2026 INSC 155.
- Shankar Khandelwal v. Omkara Asset Reconstruction Pvt. Ltd., 2026 INSC 429.
- Flexing It Services Pvt. Ltd. v. Colvyn James Harris, Delhi High Court, 6 April 2026.
- Rimjhim Stainless Ltd. v. Mukesh Singhal, Delhi High Court, 4 February 2026.
Authoritative Online Sources
- Limitation Act, 1963 — India Code
- Shankar Khandelwal v. Omkara Asset Reconstruction
- Rimjhim Stainless Ltd. v. Mukesh Singhal
- Flexing It Services Pvt. Ltd. v. Colvyn James Harris
Key Takeaways
- Section 18 and Section 19 are separate mechanisms and should not be conflated.
- A Section 18 acknowledgment must be written, signed, relate to the subsisting liability and be made before limitation expires.
- Balance sheets can qualify, but the entry, signature, notes and timing must be examined.
- Electronic communications can qualify where authorship, acknowledgment and electronic-evidence requirements are proved.
- A creditor’s legal notice does not restart limitation.
- Partial acknowledgment extends limitation only to the liability actually acknowledged.
- IRP/RP claim admission is not an acknowledgment by the corporate debtor.
- Section 19 part-payment requires more than merely pointing to movement of money; statutory proof requirements must be satisfied.
- Acknowledgment or payment after expiry cannot revive the old limitation period under Sections 18 or 19.
- A written promise concerning an already time-barred debt raises the separate Section 25(3) Contract Act framework.
Disclaimer
This article is for general legal education and civil-law awareness only. It does not constitute case-specific legal advice, advertisement or solicitation. Limitation depends on the governing cause of action, applicable Article, due date, terms of contract, exact acknowledgment language, authority of the signatory, part-payment evidence, electronic-record proof and the complete chronology of the individual dispute.